2. The important rules about Initial Margin
The initial guaranteed amount required for a buy order = (IM * contract quantity * buy limit price * multiplier). Trading commissions calculated based on the buy limit price will be reserved in advance; however, actual commissions will be paid when the order is executed and calculated based on the actual transaction price.
The initial guaranteed amount required for a sell order = (IM * contract quantity * Max (sell limit, best bid price) * multiplier). Trading commissions calculated based on the higher risk limit tiers and the best bid price will be reserved in advance. The actual commission will be paid when the order is executed and calculated based on the actual transaction price.
If a trader's order does not increase the position, then these orders will not require an initial margin.
If a trader has both buy and sell orders in the market, then only the bid net value (buy orders-sell orders) requires a starting margin. In addition, unless the current position can be reduced, a sell order also requires a starting margin. For example, if a trader is bidding for 20 contracts of $ 100 and asking 15 contracts for $ 150, the trader needs an initial margin of 5 net buying contracts (20-15) and an initial margin of 15 selling contracts.
Since contracts use marked prices, the calculation of the initial margin will be different. If the price of a buy order is above the marked price, or the price of a sell order is below the marked price, then the trader must have sufficient funds to fully make up the difference between the bid price and the bid price. For example, if the marked price is $ 100 and a trader submits a buy order with 10 contracts at $ 110, then the required starting guarantee amount = ( IM * 10 contracts * $ 110 * contracts unit) + (100% * 10 contracts * ($ 110- $ 100) * contracts units).
Maintenance Margin is calculated based on the contracts' marked price.
For all positions, the required maintenance guarantee amount = (MM * contracts number * marked price * contracts unit). This is the minimum guaranteed amount required to maintain the position. If it is lower than this amount, the position will be liquidated.
3. References of Margin Terms
Special Notice: Different margin currencies belong to different margin accounts and do not affect each other.
Contract Account Balance: Transfer in - transfer out + realized profit and loss.
Unrealized Profit and Loss: The current profit and loss of open positions.
Margin Balance: Total equity in contracts account.
Margin balance = contracts account balance + unrealized profit or loss.
Position Margin: The portion of the margin allocated to open positions as the initial margin requirement.
Position margin = position value / selected leverage.
Order Margin: The portion of the margin allocated to the orders as the initial margin.
Available Balance: Margin that can be used to open new positions.
Available balance = contracts account balance + min (0, Unrealized Profit and Loss) - order margin - position margin.
Overall Leverage Level: Total position value / margin balance.